The Pros and Cons of Using a Temp Agency
Temporary staffing dates back to the 1940’s, when businessman William Kelly began outsourcing professional services like administrative and clerical work. His temporary employees, who came to be known as “Kelly Girls,” were so popular that the term became widely used for temp workers across all industries, regardless of the work being done or the gender of the staffer.
Needless to say, we’ve come a long way since then. The industry has also evolved and grown in ways I never thought possible when I started my professional career as a recruiter in 1993. In fact, when I interviewed for a job with a staffing company as a senior in college, I was simultaneously learning about its existence as a profession.
Now, hiring contract employees has become commonplace among businesses looking to respond to fluctuating demand or cover short-term staffing shortages. This can be a viable strategy to reduce hiring costs and bridge staffing gaps during uncertain times—but is it right for you?
Here, we’ll cover the biggest temp agency pros and cons to help you decide whether it is the right move for your organization.
How Does Temporary Staffing Work?
When you enlist the services of short-term (“temp”) workers, you’ll typically go through a temporary, or contract, staffing agency. The agency will work to understand your needs and fill the required positions from its network of interim staffers.
These employees are actually employed by the staffing agency, not the company where they will be working; the company “leases” the labor from the agency as part of its staffing agreement. This keeps onboarding time and effort to a minimum and eliminates the need for the company to complete lots of new hire paperwork for employees who may only be around for a few months. It also enables the temporary workers to receive benefits like health insurance as employees of the staffing agency, since most companies don’t offer benefits to non-permanent staffers.
Pros of Temporary Staffing
1. On-demand hiring
Once you’ve established a relationship with a staffing agency, hiring new temp workers can happen in as little as a day or two. At 4 Corner Resources, for example, we have the potential to solve hiring and have a qualified candidate working within twenty-four hours.
Since your HR department doesn’t have to deal with the typical new hire paperwork, such as tax forms, contracts, and benefits selection, the new hire can get straight to work almost immediately. This allows you to respond in real-time to workload fluctuations and changing market conditions, helping your company maintain its competitive edge.
2. Only pay for work you need
We hear from many businesses that could use some extra help, but don’t quite have the workload to fill a full 40-hour workweek. In such cases, hiring a full-time staffer even at an entry-level wage isn’t cost-effective.
Hiring these employees, on the other hand, allows you to pay only for what you need, scaling temps’ hours up or down depending on your workload. This is a great way to keep labor costs manageable while scaling your business and keeping up with your customers’ demands.
3. Cover staffing shortages
There are all kinds of reasons you might face a staffing gap. People quit with no notice, become ill, need to respond to family emergencies, and even pass away. Unexpected absences are simply part of doing business. These employees are ideal for covering gaps in your staffing chart, especially when they happen unexpectedly.
Contract staffing can also bridge the gap when a team member steps away but plans to return in the future, like when someone takes maternity leave or takes a vacation longer than a few weeks.
4. Offers a “trial run”
How many times have you wished you could take candidates for a “test drive” before committing to hire them full time? With this type of staffing, it’s a possibility. While some positions are filled with the understanding that they’re strictly for the short term, others come with the possibility of full-time employment if things go well.
Working with a person on a trial run before you hire them directly gives you a chance to better assess their effectiveness in the role and see how they fit as part of your larger team. It also offers you a way to test out different job functions, like a new role you’re thinking of adding as a full-time position, to ensure they make sense as part of your operations.
5. Access to specialized skills
Whether it’s a big new project that requires niche expertise or a specific business pain point you’re looking to solve, you may need a specialized skill no one in your workforce currently has. This can help you access such skills at an affordable price.
When we think of the stereotypical temp, we usually envision administrative and clerical work. In fact, though, this can be leveraged to fill almost any business need, from finance to marketing to technology, more cost-effectively than hiring someone full-time.
6. Increased flexibility
This hiring solution gives businesses the ability to respond quickly to changing circumstances like a sudden shift in the market or an unexpected vacancy in a key role. Being flexible makes your business more resilient as you’re able to weather changes without making dramatic sacrifices in terms of quality or budget.
7. Reduced risk
When you need to fill a staffing gap quickly, you run the risk of acting out of desperation. This can result in poor hires, which can incur numerous unnecessary costs. Temporary staffing mitigates this risk by empowering you to meet operational demands without making a permanent hire.
Additionally, it can mitigate risks associated with economic uncertainty or changing market conditions.
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Cons of Temporary Staffing
1. May require more training time
Temporary staffing is just that: a short term fix. The more you rely on this labor, the more people you have to consistently train and oversee to make sure the work is done correctly. At a certain point, it becomes ineffective to continue training workers for a job that should really be a permanent one.
To maintain efficiencies in your staffing model, be sure to analyze roles regularly to ensure that they are A) still filling the need you originally intended and B) haven’t expanded in scope into something that would be more appropriate as a full-time position.
2. Less time to vet candidates
Since you’re not making a permanent commitment to an employee, you may be less likely to invest the same amount of time screening and qualifying them as you would a full-timer. This means you might settle for someone who’s purely “okay” for a job rather than holding out for the perfect fit.
In some cases, this is a reasonable trade-off for being able to move quickly and cover staffing needs fast. In others, though, like those involving sensitive information or direct client contact, you’ll want to slow down and make sure all the necessary boxes are checked before saying yes to a temp.
3. Culture fit can be a challenge
Another potential downside of hiring interim employees quickly is that they won’t all be the perfect fit for your company culture. This may result in some who don’t quite vibe with your office environment or who have difficulty collaborating with other team members.
This concern can be alleviated by choosing a qualified staffing partner, who will take your company culture into consideration when selecting employees to send your way.
4. Long-term planning is more difficult
It’s common management knowledge that new hires need anywhere from a few months to a full year to become proficient enough in their role to make meaningful contributions to the company. Unfortunately, temporary staff often doesn’t reach this threshold, so it’s tough for them to become an ingrained part of your team. This can make long-term planning a challenge in terms of workflows and team member responsibilities.
Further, you’ll need to bear in mind that not all temps are looking for full-time employment as their end goal. Some enjoy the flexibility of nonstandard work hours or the variety of working a few different jobs. This matters because it’s a short-term arrangement on their end, too; these staffers may be less reliable or may be more likely to jump ship for a better opportunity than someone who’s employed full-time.
5. Comes with a different set of legal requirements
Hiring interim employees, like hiring independent contractors, comes with its own set of legal considerations you’ll want to be aware of. Mainly, you must be careful not to blur the line between temporary and full-time employment.
First and foremost, employment attorneys advise companies to cap contract employment at six months. After that point, you should seriously consider hiring the person as a part-time or full-time employee. If you don’t, you may open yourself up to legal pitfalls associated with treating these workers unfairly by not offering them benefits.
Next, even though a worker hired through a staffing agency isn’t your employee, you’re still liable for providing them with the same protections from workplace harassment and discrimination as you would any in-house employee and a safe and hazard-free work environment.
Finally, be sure to read your staffing agreement carefully to ensure that it clearly outlines the roles and responsibilities of your company and the agency, like who is responsible for covering unemployment contributions and completing I-9s for the worker.
How to Determine if Working With a Temp Agency is Right for Your Business
Skill requirements
Consider whether your skill requirements are short- or long-term in duration and the level of specialization required. If you require a highly niche skill for a short amount of time, this may be the perfect opportunity to leverage an agency to meet your needs.
Resources
Do you have the time to source, recruit, and onboard workers internally? Working with an agency can save your HR department time by outsourcing these tasks to professionals.
Staffing trends
Evaluate your historic workforce data to identify trends. If your staffing needs fluctuate frequently or you anticipate a spike in demand for workers in the near future, a temp agency can provide a cost-effective solution and minimize disruptions to your workflow.
Budget
Analyze whether it would cost more to handle hiring yourself compared to leveraging a third-party agency. When adding up internal costs, you’ll need to factor in recruiter salaries, overtime costs, recruitment marketing, new hire onboarding, training, and employee benefits.
Strategic goals
Consider how temporary staffing aligns with your long-term strategic goals and objectives. Determine whether short-term workers could lead to a long-term solution by converting these positions into permanent roles over time based on performance and business needs.
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Solve Staffing Shortages with a Qualified Temporary Staffing Agency
The right staffing agency can make working with temporary employees easy and hassle-free. We offer temporary staffing solutions that help businesses of all sizes hire on demand and meet their operational needs. Whether you’re dealing with a special project, experiencing rapid growth, or have seasonal hiring needs, we can connect you with skilled, reliable workers to fill the necessary gaps.
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